January 05, 2006

Pipe Wrench

A fight over natural gas prices between Russia and Ukraine has given the European Union a rude New Year's warning about energy dependency and opened up worrying questions about its relationship with Moscow. ...
The dispute seemed to have been settled, thanks to a complex deal by which Ukraine will pay more for its imports of Russian gas but not the immediate quadrupling that Moscow had demanded.

That demand was widely seen by analysts as a punishment after the Ukrainian people swept aside the country's pro-Russian leadership and installed a Western-leaning president, Viktor Yushchenko, in the 2004 "Orange Revolution."

Mingled with relief in European capitals at the resolution of this crisis is the shuddering realisation that, little by little, Europe has allowed itself to become dependent on an authoritarian country, creating a "Saudi-style" relationship in which shortcomings on democracy and human rights are overlooked in exchange for vital energy supplies. ...

Germany's Sueddeutsche Zeitung warned: "Today Ukraine is the victim, but no one can say that it will not also spread to Western Europe." ...

The French conservative daily Le Figaro blasted the EU for "handling Moscow with kid gloves, in the anxiety of preserving its strategic partnership with its main energy supplier."

"The Russians have acted in a very brutal manner, obviously not caring about or underestimating the impact on their image as chair of the G8," said French analyst Arnaud Dubien of the Institute for International and Strategic Relations in Paris, referring to the Group of Eight presidency that Russian assumed at the start of the year.

"For them, there's nothing shocking about what they did, which says a lot about the way they see things." ...

On present trends, imports will account for 70 per cent of EU gas supplies by 2020 -- and Russia, through its state monopoly, Gazprom, which controls a third of global reserves, is likely to be the key provider.

The temporary cutoff of gas to Ukraine by Putin's Russia is just the latest proof that the days of the czars and Russia's imperial ambitions may not be over. There's still a bear in the woods.

Earlier this year, former KGB Col. Vladimir Putin addressed the Russian parliament and told the captive (no pun intended) audience that the "demise of the Soviet Union was the greatest political catastrophe of the century." If he has a favorite song, it must be "Those Were the Days." ...

"This year Russia has become a different country," said Putin's top economic adviser, Andrei Illarionov, before he resigned late last month. "It is no longer a democratic country. It is no longer a free country."